Rite Aid 2013 Annual Report Download - page 109

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 2, 2013, March 3, 2012 and February 26, 2011
(In thousands, except per share amounts)
18. Commitments, Contingencies and Guarantees (Continued)
January 7, 2013. The Order was not appealed and is final. Settlement funds to those who chose to
participate in the settlement were disbursed on March 13, 2013 concluding the matter.
The Company has been named in a collective and class action lawsuit, Indergit v. Rite Aid
Corporation et al pending in the United States District Court for the Southern District of New York,
filed purportedly on behalf of current and former store managers working in the Company’s stores at
various locations around the country. The lawsuit alleges that the Company failed to pay overtime to
store managers as required under the FLSA and under certain New York state statutes. The lawsuit
also seeks other relief, including liquidated damages, punitive damages, attorneys’ fees, costs and
injunctive relief arising out of state and federal claims for overtime pay. On April 2, 2010, the Court
conditionally certified a nationwide collective group of individuals who worked for the Company as
store managers since March 31, 2007. The Court ordered that Notice of the Indergit action be sent to
the purported members of the collective group (approximately 7,000 current and former store
managers) and approximately 1,550 joined the Indergit action. Discovery as to certification issues has
been completed. The parties have fully briefed the issues of Rule 23 class certification of the New York
store manager claims and decertification of the nationwide collective action claims and are awaiting a
ruling from the Court. At this time, the Company is not able to either predict the outcome of this
lawsuit or estimate a potential range of loss with respect to the lawsuit. The Company’s management
believes, however, that this lawsuit is without merit and not appropriate for collective or class action
treatment and is vigorously defending this lawsuit.
The Company is currently a defendant in several putative class action lawsuits filed in state courts
in California alleging violations of California wage and hour laws, rules and regulations pertaining
primarily to failure to pay overtime, pay for missed meals and rest periods and failure to provide
employee seating. These suits purport to be class actions and seek substantial damages. At this time,
the Company is not able to either predict the outcome of these lawsuits or estimate a potential range
of loss with respect to the lawsuits. The Company’s management believes, however, that the plaintiffs’
allegations are without merit and that their claims are not appropriate for class action treatment. The
Company is vigorously defending all of these claims.
The Company was served with a United States Department of Health and Human Services Office
of the Inspector General (‘‘OIG’’) subpoena dated March 5, 2010 in connection with an investigation
being conducted by the OIG and the United States Attorney’s Office for the Central District of
California. The subpoena requests records related to any gift card inducement programs for customers
who transferred prescriptions for drugs or medicines to the Company’s pharmacies, and whether any
customers who receive federally funded prescription benefits (e.g. Medicare and Medicaid) may have
benefited from those programs. The Company has substantially completed its production of records in
response to the subpoena and is unable to predict the timing or outcome of any review by the
government of such information.
The Company received a subpoena dated May 9, 2011 from certain California counties seeking
information regarding compliance with environmental regulations governing the management of
hazardous waste. The Company has responded to the subpoena, is cooperating with California
regulators, and continues to review its operations pertaining to the management of hazardous materials.
108